Hi M.,
I recently responded to another mom's post on this subject. Here is what I wrote:
Don't worry! If my daughter could break the habit, there is hope for anyone. She was truly hooked on the bink. I got lots of advice, but nothing worked for us in the beginning. Cold turkey ended up in hysterics and vomiting. The Binky Fairy was a joke. She couldn't care less if other little babies needed the binky more than she. When I told her that it was broken and had to be thrown out, she told me she would use her money to buy a new one (so much for teaching her about money!).
What finally worked for us was this: we cut a small hole in the tip of the binky so that there was no more suction. She didn't seem to mind this and kept it in her mouth anyway. We left her like this for a while since I felt that it was no longer a threat to her teeth and wasn't hurting anyone (she only used it at bedtime). Then, later on, I cut a bit more off, then some more, and then more gradually until there was just a stump of the nipple left. At this point, she held the plastic part in her hand at night for several weeks. This was also fine with me, and I let her have it. Finally, one day, she told me she didn't want the binky in her crib anymore. I took it away and haven't heard about it since.
We started this process shortly after her second birthday, and it took just a couple months, I think. Meanwhile, her baby sister was using a binky the whole time, and this didn't cause any problems. I worried a lot about this issue, but they really do give it up when they're ready. I've never seen a kid go to college with a binky!
Good luck!